Global Carbon Pricing Expands to Cover Nearly 30% of Emissions as Asia Accelerates Climate Market Adoption: World Bank Report

SINGAPORE, May 24, 2026 – Carbon pricing systems now directly cover nearly 30 per cent of global greenhouse gas emissions, marking a major milestone in the evolution of global climate policy and carbon markets, according to the World Bank Group’s State and Trends of Carbon Pricing 2026 report.

The report highlights how carbon pricing and carbon credit markets are rapidly expanding across both developed and emerging economies, even amid growing geopolitical uncertainty, fiscal pressures and volatile global energy markets.

According to the report, 87 carbon pricing policies, including emissions trading systems (ETSs) and carbon taxes, are now implemented globally, with coverage rising significantly over the past decade.

The World Bank noted that emissions coverage under ETSs has tripled since 2016, rising from 8 per cent to more than 24 per cent of global greenhouse gas emissions, while carbon taxes continue to account for around 4 to 5 per cent coverage globally.

Asia Emerges as a Key Carbon Pricing Growth Region

One of the report’s most significant developments is the acceleration of carbon pricing implementation across Asia.

New emissions trading systems and carbon taxes have recently been implemented in India, Japan and Viet Nam, reflecting the growing importance of carbon pricing within Asia-Pacific’s climate transition strategies.

The report also highlighted that if all carbon pricing policies currently under development are fully implemented by 2030, nearly one-third of global emissions could fall under direct carbon pricing frameworks.

Singapore was singled out as one of the jurisdictions implementing sharp increases in carbon tax rates, with the report noting that the country increased its carbon tax by 80 per cent in 2026.

The report additionally pointed to the growing global influence of the European Union’s Carbon Border Adjustment Mechanism (CBAM), which, despite directly covering less than 0.5 per cent of global emissions, is already driving wider interest in border carbon adjustments and domestic carbon pricing systems worldwide.

Globally, average carbon prices across ETSs and carbon taxes have nearly doubled over the past decade, increasing from approximately US$10 per tonne of CO2 equivalent in 2016 to almost US$21 per tonne in 2026.

However, the report warned that ETS markets experienced heightened price volatility in 2026 amid disruptions in global commodity and energy markets.

Carbon Markets Continue to Expand Despite Volatility

The report also showed continued momentum in carbon credit markets, although market dynamics remain uneven.

Global carbon credit issuances rose by 8 per cent between 2024 and 2025, although issuance levels remain around 20 per cent below their 2022 peak.

At the same time, governmental crediting mechanisms increased from 24 to 34 over the past decade, while issuances from government-linked mechanisms rose nearly 40 per cent in 2025 compared with 2024.

A notable milestone highlighted in the report was the first provisional issuance of credits under the Paris Agreement Crediting Mechanism (PACM) to a clean cookstoves project in Myanmar.

Despite rising issuances, retirements of carbon credits declined by more than 10 per cent from 2024 to 2025, largely due to a sharp drop in compliance-related retirements in California after a temporary spike in 2024.

Still, voluntary demand continues to dominate carbon markets, accounting for more than 80 per cent of total retired credits in 2025.

The report identified growing buyer preference for high-integrity credits and projects carrying strong third-party ratings, particularly as scrutiny around carbon credit quality intensifies globally.

Carbon credits eligible under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) were trading at premiums ranging between US$15 and US$22 per tonne of CO2 equivalent, significantly above most other credit categories trading between US$1 and US$14.

The report also highlighted tightening supply conditions for Southeast Asian forest conservation credits, which drove a short-term price spike in the second half of 2025.

Meanwhile, future demand signals continue to strengthen, with the report citing US$12 billion worth of carbon credit offtake agreements signed during 2025, representing a threefold increase compared to 2024 levels.

The World Bank said the broader carbon pricing ecosystem is becoming increasingly sophisticated, with expanding infrastructure around credit generation, verification, ratings and international trading.

As countries seek pathways to balance industrial growth, energy security and decarbonisation, the report suggests carbon pricing and carbon markets are becoming increasingly central tools within both climate policy and sustainable development strategies globally.